Tag Archives: Harvard Business Review

HBR Study on Employee Engagement

A recent Harvard Business Review (HBR) survey revealed many companies view employee engagement as a key success factor. But less than half of firms tie engagement metrics to customer satisfaction or financial results. Even more disturbing: just 24 percent believed their workforce is highly engaged.

This research underscores what many business leaders know. Many organizations have work to do move from vision to action in the realm of employee engagement.

Another key finding: organizations that make employee engagement a top priority do a better job at measuring its impacts. Those “high prioritizers” comprised 48 percent of the study total. Thirty-eight percent (38%) of respondents were “moderate prioritizers” with 14 as “low prioritizers.”

What Employee Engagement Leaders Do Differently

As the figure below notes, high prioritizers see a stronger relationship between employee engagement and customer satisfaction compared to moderate or low prioritizers. And high prioritizers take concrete action steps to operationalize that knowledge.

Employee engagement links to customer satisfaction

Source:  “The Impact of Employee Engagement on Performance,” Harvard Business Review

According to the study, brands that prioritize employee engagement showed some similar characteristics. Those include:

  • Precise internal surveys: Engagement leaders go beyond generic approaches to measuring employee satisfaction. They craft internal surveys that include direct questions about employee experiences. Detailed survey analysis is another hallmark of high engagement companies. They sift through the results to identify latent employee dissatisfaction. Then, senior leadership uses survey results to shape business directions.
  • Aligned operational goals: Leaders do not take a “set it and forget it” approach to strategy. Instead, they use strategy as a foundation for operational and individual goals—at every organizational layer. Top leaders establish core goals. Middle managers create specific, tangible objectives for employees to tie their performance to business objectives. Employees receive the resources they need to success and remain accountable for their personal goals.

Engagement leaders also link employee engagement to customer feedback and satisfaction surveys. They also have strong recognition programs, which link employee performance to customer happiness and business results.

Creating an Engagement Culture

As the HBR study reveals, effective internal and external surveys are keys to fostering an engagement culture. Within the company, engagement leaders avoid packaged surveys and tailor data collection to specific needs within their environment. In addition, they look for meaning behind the metrics and identify latent pockets of employee dissatisfaction. They also craft external surveys to collect valid insight on customer perceptions and link results to individual performance.

Firms seeking to excel at employee engagement need to heighten focus in these areas:

  • Surveys: Leaders need to move beyond annual customer and employee surveys. They also need rapid results analysis to make solid business decisions based on feedback. Survey tools that empower both closed-ended and free-form input, along with real-time results analysis, are vital.
  • Employee experience compliance: Survey results can also provide a clear picture of how well employees perform against brand standards. Advanced experience compliance solutions offer real-time insight on each customer interaction with front-employees. These tools allow brands to take immediate action when customer dissatisfaction arises and provide employees resources and knowledge they need to portray the brand.

Engaged employees are far better brand ambassadors—and this has a major impact on customer perceptions. As a recent Forbes article explained, “employees must not only be plausible representatives of your brand’s key attributes, but they must exude the company brand.” Top-to-bottom engagement and authentically listening to external and internal feedback are paths to brand alignment.

The Engagement Imperative

Business leaders now know that having an engaged workforce isn’t a good idea–it’s a strategic imperative. Enterprises must keep a pulse on customer and employee sentiment and have real-time insight into brand expression to thrive in today’s customer-driven world.

***

Engage with Us

Authoritative research has validated that employee engagement affects customer satisfaction and financial performance. Is your brand taking steps to operationalize this truth? We would love to learn from your experience:

  • Do you have an advanced process for collecting, measuring, and acting on employee feedback?
  • How do you tie customer post-interaction survey results to employee performance?
  • What performance metrics do you use to empower your employees to align with brand mandates?

Add a comment or ask a question in the space below. We welcome your input and insights.

Happy Customers Stay Loyal, Spend More

Most of us intuitively recognize when we receive a great customer experience—or a poor one. But a recent Harvard Business Review (HBR) article tackled the question on every business leaders mind. How does the intangible feeling of customer experience affect revenue?

In the HBR-published study investigators analyzed data from transactional and subscription-based businesses. These two business models have different revenue-generation focuses. A transactional business relies on repeat customers, frequent returns, and amount spent per visit. By contrast, subscription-based businesses count on renewals, cross-selling and up-selling.

Despite their varied approaches to generating revenue, researchers found a direct link between past customer experience and future spend.

  • Transaction-Based Businesses: Research revealed that customers who gave the best experience scores spent 140% more than those who had the poorest experiences.
  • Subscription-Based Businesses: Results demonstrated that those with the poorest experiences were only 43% likely to renew, while those with the best experiences were 74% of remaining members.

Clearly, delivering good customer experiences delivers measurable financial returns.

The Cost of Poor Customer Experience

In the past, some firms argued that customer experience management was an expensive proposition. After all, unhappy customers tend to require more support and return more goods then others. Untangling these difficult situations seems like a waste of energy.

However, dissatisfied customers can damage your ability to retain existing customers and attract new ones. According to the White House office of Consumer Affairs, a single unhappy customer tells an average of nine to 15 people about their poor experience. Also, 13% tell more than 20 people about their dissatisfaction.

Today, your customers are more likely to use the Internet to voice their concerns. According to analysis from Dimensional Research, 45% share negative experiences on social media and 35% post negative online reviews. Moreover, 86% of respondents in the same study said negative online feedback influenced their buying decisions.

The bottom line: a single unhappy customer can drive away tens to hundreds of prospective customers. Multiple that one dissatisfied customer by one hundred or one thousand. Think of all the potential lost revenue.

Do You Know Who Your Unhappy Customers Are?

One way to discern who has had poor customer experiences is to see which customers post negative thoughts on social media or leave bad reviews online. However, by then, the damage is done and salvaging the relationship may be difficult. And others’ impressions have likely been tainted by this negative sentiment.

There is a better way.

Implementing a post-interaction survey program is an imperative for today’s businesses. You can capture immediate feedback to learn if your front-line representative interacted effectively with your customer. If your customer registers a negative feedback score, you can take immediate corrective action. This can include reaching out to the affected customer and providing corrective training or feedback to the front-line employee who delivered the poor experience.

The key is moving from large-scale customer satisfaction trend analysis to real-time alerting of negative survey responses.

Moving from Data Collection to Action

A lot of companies are collecting customer survey data—including free-form text comments. However, many have work to do to move from collection to action.

According to Voice of the Customer (VoC) maturity analysis from the Temkin Group, 41% of surveyed companies merely collect data and 39% perform some analysis. Only 11% have achieved the highest two levels of VoC maturity—and those companies do more with their customer insights, have stronger executive support for customer experience programs, and achieve better business performance overall.

Those aiming to deliver best-in-class customer experiences need to focus on robust, real-time survey analytics.

Putting it All Together

Dated thinking that limited spending on customer experience management is shifting. Now, business leaders know they need systems and processes to help them deliver the levels of service excellence customers expect.

Those that make smart moves sooner—by taking prompt, strategic action to address customer feedback—have an unprecedented opportunity to get ahead of the competition. The rewards will be tangible and financial.

It’s a proven fact: Happier customers = loyal customers = more revenue.

***
Engage with Us

Please contribute your thoughts on this high-value topic. Answer one of the questions below or add your own ideas:

  • Do you have any evidence—anecdotal or quantifiable—to show how customer experience and financial performance tie together in your company?
  • Are you prepared to move from collecting survey data to in-depth analysis?
  • How do you help mitigate negative customer perceptions before they hit social networks or online review sites?

We look forward to your insights.